Case Law Details
SVR Developers Vs Assistant Commissioner (FAC) (Madras High Court)
The Madras High Court disposed of a writ petition challenging an order passed in FORM GST DRC-07 dated 22.04.2024 for the assessment year 2018-19. The petitioner, engaged in renting immovable property, stated that it had rental and amenities income totaling ₹2,96,32,793 on which applicable GST had already been paid. The petitioner contended that it was under a bona fide belief that filing of GSTR-9 Annual Return was inapplicable and that GSTR-9C was also not applicable since the aggregate turnover was below ₹5 crore. As no reply had been filed to the show cause notice, the proposal in the notice was confirmed through the impugned order.
The High Court noted that the issue was covered by an earlier decision of the Court in Ms. Kandan Hardware Mart vs. Assistant Commissioner (ST)(FAC). In that decision, the Court had considered the effect of Notification No.7/2023-Central Tax dated 31.03.2023, as amended by Notification No.25/2023-Central Tax dated 17.07.2023, relating to waiver and reduction of late fee for delayed filing of annual returns in GSTR-9 and GSTR-9C.
The earlier judgment referred to the decision of the Himachal Pradesh High Court in M/s. R.T. Pharma vs. Union of India, where it was held that taxpayers who had filed annual returns before issuance of the amnesty notification should also receive the benefit of reduced late fee. The Madras High Court had held that the benefit of the notifications should extend to taxpayers who filed returns before 01.04.2023.
The Court further held that where a specific penalty or late fee is prescribed under Section 47 of the GST enactments for delayed filing of returns, imposition of general penalty under Section 125 cannot be sustained. Section 125 applies only in situations where no separate penalty is provided under the GST enactments. Accordingly, the Court had earlier ruled that taxpayers could not be subjected to late fee exceeding ₹10,000 under each of the CGST and SGST enactments, and general penalty under Section 125 was liable to be set aside.
Relying on the earlier ruling, the Madras High Court in the present case set aside the impugned order insofar as it imposed late fee exceeding ₹10,000 each under CGST and SGST Acts and also imposed general penalty under Section 125. The petitioner was directed to voluntarily pay the admitted tax liability in cash or through the electronic cash register within thirty days from receipt of the order. The Court also directed that upon such payment, attachment of the petitioner’s bank account should be lifted, provided there were no arrears for any other tax period apart from the disputed demand. Further proceedings initiated under Section 78 of the CGST Act were directed to remain in abeyance for three months pending further orders. The writ petition was disposed of without costs.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Mrs.K.Vasanthamala, learned Government Advocate takes notice for Respondent.
2. This Writ Petition is being disposed of at the stage of admission itself with the consent of the learned counsel for the Petitioner and the learned Government Advocate for Respondent.
3. In this Writ Petition, the Petitioner has challenged the impugned Order Impugned Order vide FORM GST DRC – 07 bearing Reference Number ZD3304241610105 dated 22.04.2024 in GSTIN 33AALFT1108R1ZV/2018-19 passed by the respondent.
4. The learned counsel appearing for the petitioner would submit that the petitioner is merely renting of immovable property with a rental and Amenities income of Rs.2,22,23,189/- and Rs.74,08,604/- respectively totally to Rs.2,96,32,793/- on which applicable GST has already been paid and since the petitioner is not undertaking any business, he was under the bonafide belief that GSTR-09 Annual Return is inapplicable and GSTR-9C is inapplicable as the aggregate turnover is less than Rs.5 Crore. In the absence of any reply filed by the petitioner, the proposal in the the show cause notice has been confirmed by the impugned Order.
5. The issue is now covered by the decision of this Court in Ms.Kandan Hardware Mart Vs. The Assistant Commissioner (ST)(FAC) in W.P.No.27029 of 2023 vide order dated 02.01.2026. Operative portion of the said order reads as under:-
“205. The Division Bench of the Himachal Pradesh High Court in the case of M/s.R.T.Pharma Vs. Union of India and others, while dealing with a similar issue arising out of delay in filing of the “Annual Returns” in GSTR-9 under Section 39 of the respective GST Enactments held that it would be unjust to deny a “Late Fee”, waiver to a taxpayer who filed their Goods and Services Tax (GST) Annual Returns (GSTR-9 and GSTR-9C) before a specific Amnesty Notification was issued in Notification No.7/2023-Central Tax dated 31.03.2023, and was amended by Notification No. 25/2023-Central Tax dated 17.07.2023.
206. Therefore, the benefit of the above Notifications namely Notification No. 7/2023- Central Tax dated 31.03.2023 as amended by Notification No. 25/2023-Central tax dated 17.07.2023 has to be extended to all those Petitioners in Table – 4A who had filed the returns before 01.04.2023.
207. Since these Petitioners are liable to pay “Late Fee”, the question of imposing “General Penalty” under Section 125 of the respective GST Enactments cannot be countenanced in view of the reasons that “General Penalty” under Section 125 of the respective GST Enactments can be imposed only in the absence of ‘any other penalty’ under the respective GST Enactments.
208. It is therefore held that the Petitioners in Table-4A are neither liable for “Late Fee” over and above Rs.10,000/- under each of the respective GST Enactments nor liable for “General Penalty” under Section 125 of the respective GST Enactments.
209. As far as the case of Petitioners in Table-4B namely the Petitioners in W.P.No.19967 of 2023 and W.P.Nos.23356, 30854, 9867 of 2024 and W.P.Nos.47726, 38007, 48941 of 2025 are concerned, they have been subjected to only “Late Fee” under Section 47(2) of the respective GST Enactments. They have not been subjected to “General Penalty” under Section 125 of the respective GST Enactments.
210. Since these Petitioners have also filed the “Annual Returns” before 04.2023, they cannot be subjected to “Late Fee” over and above Rs.10,000/- under each of the respective GST Enactments as ordered in the case of those Petitioners in Table-4A.
211. As far as the case of Petitioner in Table-4C namely the Petitioner in W.P.No.3915 of 2024 is concerned, the said Petitioner has filed the “Annual Return” only on 01.2024 for the Tax Period 2020-2021. It was within the time under Section 44(2) of the respective GST Enactments as the said date would have expired on 31.12.2024. However, there is no scope for granting any waiver from payment of “Late Fee” under section 47 of the respective GST Enactments, as it was long after the date specified in Section 44(1) of the respective GST Enactments read with Rule 80(1) of the respective GST Rules. The said Petitioner has been imposed with “General Penalty” of Rs.25,000/- each under Section 125 of the respective GST Enactments. There is no scope for imposing “General Penalty” under Section 125 of the respective GST Enactments for the reasons stated for the other Petitioners. Therefore, to that extent W.P.No.3915 of 2024 deserves to be allowed.
212. In the result,
(i) W.P.Nos.3540, 3567, 3570, 3902 and 3966 of 2024 as detailed in Table-3 are allowed. Therefore, “General Penalty” imposed under Section 125 of the respective GST Enactments on these Petitioners are set aside. (ii)W.P.Nos.27029, 27032, 27036, 32599, 34352, 34357, 35186 of 2023 and W.P.Nos.3572, 3916, 15690 of 2024 and W.P.Nos.9988, 28786, 42416, 46522 of 2025 as detailed in Table-4A are allowed. Therefore, “General Penalty” imposed under Section 125 of the respective GST Enactments on these Petitioners are set aside. These Petitioners are liable to pay a “Late Fee” of Rs.10,000/- under the respective GST Enactments.
(iii) W.P.No.19967 of 2023 and W.P.Nos.23356, 30854, 9867 of 2024 and W.P.Nos.47726, 38007, 48941 of 2025 as detailed in Table-4B are allowed. These Petitioners are liable to pay a “Late Fee” of Rs.10,000/- under the respective GST Enactments.
(iv) W.P.No.3915 of 2024 in Table-4C is partly allowed. However, imposition of “General Penalty” under Section 125 of the respective GST Enactments is set aside in view of imposition of “Late Fee” against the Petitioner.
(v) No costs. Consequently, all connected Writ Miscellaneous Petitions are closed.”
6. In view of the order of this Court in Ms.Kandan Hardware Mart Vs. The Assistant Commissioner (ST)(FAC) referred to supra, imposition of Late Fee under Section 47 of the respective GST enactments in excess of Rs.10,000/-each under CGST and SGST and the General Penalty under Section 125 of the respective GST enactments, the impugned Order is set aside and the petitioner shall voluntarily pay the admitted liability of the tax amount in cash or from the Petitioner’s Electronic Cash Register within a period of thirty (30) days from the date of receipt of a copy of this order. On such deposit being made, the respondent shall lift the attachment of the Petitioner’s bank account, if the Petitioner not being in arrears of any other amount for any other tax period barring the amount demanded under the impugned Order. Further the proceedings initiated under section 78 of the CGST Act shall be kept in abeyance for a period of three months pending further Orders from the respondent.
7. This Writ Petition stands disposed of with the above observations. No costs. Connected Writ Miscellaneous Petitions are closed.
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